This blog follows on my blog of June 20, 2016 on the same topic. Since then, I have come across a couple more interesting mentions, again in issues of Fortune, detailing where CI techniques are being applied by teams not in the CI business. These are a couple of very big players, but it is not traditional CI. It is DIY CI.

In the first case, the article opens discussing P&G’s new Retail Innovation Center. That Center

“aims to tell P&G’s story to its major customers. There are video case studies of disrupters…. There are mocked-up shelves of both P&G’s and competitors’ products and rooms set up to show P&G items in their intended habitats…. An enormous screen…allows users to click on stories showing how new technologies and marketing strategies are used…. None of the hundreds of examples are P&G’s own innovations.[1]”

The second one involves Citigroup. Discussing a special team created to deal with the challenge of the “fintech”, the article details the “skunkworks” operation Citigroup has set up:

“On one wall there’s a five-by-10-foot chart listing all of Citi’s new fintech competitors and which of the megabank’s business lines each startup puts in jeopardy – from payments to commercial lending to wealth management.”

In addition to the competitor chart on the wall, the article notes that the team’s CEO has 2 competitor payment apps on her smart phone, as well as a stock-gifting app from a third competitor. In addition, she “has apps of five traditional banks and a brokerage firm…. Is it ok for the head of Citi FinTech to admit that she uses the competition’s products? Absolutely, says Cox [the CEO]….[2]”

The short answer is yes. Now for the long answer. Fortune magazine recently published an interview with the founders of Firehouse Subs[1] which demonstrated that the simplest and (often) least expensive approaches to developing competitive intelligence can be highly effective.

The founders, Chris and Robin, discussed the 2 years of research that went into planning the first Firehouse Subs. They took a direct, DIY approach, which Robin said produced “all good information”. How?

Chris noted that he and Robin “would go around to different sub shops [their future competitors] and say ’We’re on a diet. How much meat do you use?’” That intelligence was collected because their goal was to create a restaurant where there was both quality and quantity – “double the portions others served”. And to do that, you have to know what size your competitors serve.

Robin was then a restaurant manager and asked his friends and suppliers about future competitors. One, a food-service delivery person, reportedly saved receipts from other restaurants for Robin to look at, so he could understand what their future competitors were currently purchasing and at what price. Also, “[t]he bread-delivery guy would gossip about competitors.”

Not exactly high tech, but very effective. How effective? Now, the article reports that Firehouse Subs has over 900 restaurants that did $600 million in sales (2015).

I have previously discussed situations when there may be little or no demand for CI. Let me now get into more situations where the demand for CI may become diminished.

For the first, I saw in a recent issue of Fortune an article by Geoff Colvin – “The New Allure of Going Private” (June 1, 2016). In that article, the author discussed the disadvantages of going public, and the related benefits or going (or staying) private. Along them he noted that “the many disclosures required of public companies are rich with information for competitors to study.” 1 point for staying private. Why give competitively sensitive data to your competitors if you do not have to?

Later, the author cited the case of Dell which had to release information on its losses even though it was a private company. Why? Because the rules governing public companies can slop over onto private companies:

“Private companies with publicly held debt may still have to file quarterly statements with the SEC, and if a private company wants to buy a public one, it must publish detailed internal data…”

The impact on CI? If you are private, consider staying private because you will release less competitively sensitive data. If your competitors are similarly situated, that may then create an atmosphere where all competitors in that market space see little need to develop or maintain CI capabilities, since the necessary data appears to be so hard to collect. By the way, that is not always the case.

A second situation arises out of the current state of the US economy. I have talked with many in business, and hear a common thread, particularly from those in the largest public firms. It is variously called caution, fear, reluctance, etc. It has as one of its characteristics the current positioning of many firms. The phrases used to describe that positioning include surviving, defensive, and avoiding risk. That language has replaced language such as positioning to grow faster, being more aggressive, and making more money. To put it bluntly, there is, in some cases, a loss of a sense of competing in the current economy. And, if your firm is not really competing, why, pray tell, would it feel that developing and using CI is a priority?

Why don’t more firms use dedicated competitive intelligence personnel or teams? That is complex issue, with at least 3 different trends contributing to it.

The first, as readers of this blog know, is the rise of the DIYers. That is, the increase in the number of managers and executives who, officially or not, with or without training, develop some or all of the competitive intelligence that they need for their product/service development, management, and sales responsibilities.

The second and third, to my mind, arise out of changes in the competitive structure in the United States, at least.

The second one is what has been called “co-dependency” among larger firms in the technology industries[1]. As one author put it, “tech’s big guns must play nice with one another”. That is, the major tech companies are so intertwined, even interdependent in some areas, that they no longer compete vigorously, here I stress vigorously, on every front. If there is less competition, do they feel less need, or no need, formal for competitive intelligence activities?

The third is a related trend, but not limited to the technology industries. That trend is the notable decline in competition in many US industries[2]. One recent analysis argued that the presence of “steep earnings” in many industries may indicate monopoly positions or at least the stifling of competition through regulations and tax rules, influenced by (expensive) lobbyists in those sectors. Let’s go a little further – if there is a monopoly position or a near monopoly position, there is no competition, real or threatened. So why have any CI? Against whom is it directed?

Another analysis indicates that, in many US industries, consolidation has produced oligopoly or near-oligopoly positions. Now, again dig down deep in your economics lessons. What are the characteristics of an oligopoly? It is a market dominated by just a few sellers or suppliers. And what does that mean for that sector? In some cases there can be excessive, even explosive, competition, leading to very low prices and the eventual destruction of a firm. But, in most cases, there is a tendency towards cooperative behavior – overtly or covertly. Sometimes that cooperation can violate the anti-trust laws.[3] Falling short of that illegal activity is the growth of a tendency to live and let live.

In either of these two cases, there is no longer pure competition. So why should the desire to aggressively utilize something as “competitive” as CI be present?

[3] There may be a tendency for those in these markets to avoid conducting any CI on the mistaken basis that such activities could be considered as anti-competitive, because they involve tracking a competitor and its pricing. The actual legal line is colluding with competitors with respect to pricing, etc.

Previously, I have written about CI analysis, with tips on what to do and not to do to keep your mind sharp and to do it well. There is more to add. Here, I want to talk about that vital contemporary skill – multi-tasking.

Multi-tasking means you have developed the ability to talk on the phone while working on a memo and reading incoming emails copied to you. It is a critical skill for surviving corporate information overload. Mastering it makes you more productive. Right? Wrong!

Let’s start with what is killing business productivity. I would direct you to a great article on the continuing slow-down of business decision-making – “Revving Up Your Corporate RPMs” by Tom Monahan.[1] This piece points out that “[m]ost business activity is slowing down, not accelerating”. As proof, Monahan points to documented increases in things like the average time to hire to a new employee, to deliver an IT project, or to close a business-to-business sale.

Why the slowdowns? Among the reasons he gives are the growth in “control and risk-management functions, which are too poorly coordinated” as well as the rise of “transformation” which puts a business into “a state of near paralysis” in the name of improving it. Don’t believe that? Try to get a purchase order from many firms in less than 30 days, or to get any decision on anything while a firm is undergoing a “strategic review”.

Finally, Monahan points to technology which assists in adding stick-um to the process of decision-making. How? Think 14 people copied on emails, or working in “collaborative” companies. Monahan’s research finds that “60% of employees must consult with at least 10 colleagues each day just to get their jobs done.”

Now, look at multi-tasking. As I have noted earlier, millennials seen particularly addicted to multi-tasking. For those of us in CI, that means that “if you can get their attention during the combined IM, email or the telephone conversations, you are more likely to be able to elicit at least one or two pieces of competitively useful information because they are not paying full attention to what they are saying”. That is, their attention is diminished by multi-tasking, as is their productivity.

Now imagine a firm filled with people who think that they have to be multi-taskers to survive the daily consequences of lack of coordination, temporary corporate paralysis and/or excessive collaboration. Visualize them facing the pressure to review all of those emails they are copied on or “collaborating” with 17 associates in order to come to a single decision. Is multi-tasking contributing to more stick-um or is it just another unfortunate result? Does it matter? As for the CI analytical process (and anything else that requires serious concentration), stay as far away from multi-tasking as you can. Uni-task.

Fortune magazine every year selects its Fortune 100, 500 etc. This year, on its website Fortune.com, Fortune provides its own SWOT (strength-weakness-opportunity-threat) analysis for each of the Fortune 100 companies.

If your firm competes with one of the firms so profiled, I suggest that you proceed to the Fortune 500 home page, select that firm and read the SWOT analysis there. It may provide you with some help. But don’t accept it as the end of your research or even worse, as a substitute for your own research and analysis. Regard it, at best, as yet another input.

Now, if your firm is one of those so profiled, also review the SWOT material on the website. If the analysis, whether of strength or weakness, opportunity or threat, is accurate, that means that your company is just that much more transparent to your competitors. You may want to think about protecting against that sort “disclosure” in the future – if you can.

What if you disagree with the analysis that you find here? First, think it through. Is it possible that the unnamed analysts who provided this for Fortune are correct and that you and your colleagues at your firm are not? If so, then you have gained an important insight.

Second, if it turns out that the analysis is inaccurate, dated because of very recent events, pointing out something that your firm is already doing something about, etc., do not just stop there.

Above all, please do not publicly challenge this analysis as incomplete or dated etc., or let your firm do so (if you can stop it). By doing that, whether in a press release or just in an email to a colleague or college classmate, you are simply letting your competitors know something they should not know. Don’t make a good situation, that is, one where competitors are potentially being misled by the mistakes of a third party, into a bad situation, that is correcting their (unknown) error.

Instead, consider how Fortune’s erroneous/incomplete analysis may impact how a competitor of yours will act. Then think through how your firm could/should react to their possible forthcoming (misdirected) actions. Think of it as a wrestling move: you expect an effort to charge at you, but you can step out of the way because you know it’s coming, and then bring down the competitor while it is off balance. In other words, anticipate a reaction to misdirection and then exploit it.

An article in the May 1, 2015 issue of Fortune, “Startups… Inside Giant Companies”[1], details efforts at huge companies like MasterCard, Coca-Cola, and General Electric to graft the “elixir of creativity” onto their multi-thousand person corporations by authorizing internal small unit “startups”.

Whether that works or not is still up in the air. Some corporate leaders already describe this as an eventuality, and praise it as being able to attract the millennials who would rather work at a startup than in a giant corporation.

For those of us involved in competitive intelligence changes like this, which impact particularly new product development, change the way our CI will have to be conducted.

It is one thing to seek to understand the research and development process, targets, and goals of a public company by analyzing the annual reports, the 10Ks, quarterly reports, public statements by senior management, patent filings, and the profiles of dozens of employees as posted on LinkedIn. It is quite another to have to determine the very existence of a 3 teams, totaling no more than 25 employees sited in 3 countries, inside a company of 100,000 employees, and then to determine not only who is on the team, but what it is likely that they are focusing on and developing.

Here, social media, including both the business ones such as LinkedIn as well as the non-business ones such as Facebook, and YouTube, will come into prominence. When you try to dissect the future business development of major competitors, you can no longer be content in the knowledge that such companies do not change direction quickly. More and more, it will be from the detail, the micro elements, and not the body of past work, and the executives supervising the work today, the macro elements, that actionable CI will be developed.